Asian Paints shares jump 22% in a month after being range-bound for a year; here's why

Shares of Asian Paints, the market leader in the Indian decorative paint industry, are back in action with a nearly 22% rally in one month. The stock price has risen from ₹2,326 on October 13 to an intraday high of ₹2,881 on November 13.

The stock is under pressure following the announcement of Birla Opus in February 2024. The selling intensified in since October 2024 after weak Q2FY25 earnings, subdued volume growth and weak commentary soured investor sentiments. Analysts and market experts believed Birla Opus’ entry could disrupt the paint industry and lead to market share losses for Asian Paints.

This fear turned into reality as Asian Paints’ market share in the decorative paint category shrank from 59% in September 2024 to 52% in September 2025. During the same period, the market share of Birla Opus rose to 6.6%, according to industry estimates. Consequently, Asian Paints’ shares fell nearly 37% from the 52-week high levels touched in September 2024 to new 52-week low levels in March 2025.

However, the stock has witnessed strong buying interest in recent days, soaring nearly 23% in one month. Here are some factors driving the rally.

Reducing competitive intensity

The paint industry underwent a major disruption in the last one year, with new players like Birla Opus and JSW Paints (after acquiring a majority stake in Akzo Nobel) entering the industry. Birla Opus’ entry with the second-largest capacity in the industry came as a major headwind for Asian Paints, which holds the largest market share in the industry. Additionally, its aggressive marketing and pricing tactics led to market share losses for Asian Paints.

However, the current industry dynamics indicate a reduction in competitive intensity. Certain media reports indicated that Birla Opus has withdrawn aggressive schemes like 10% additional grammage to dealers and aggressive price cuts for consumers. This gives existing legacy players like Asian Paints an extra edge with its vast network, brand legacy and consumer trust. Early tailwinds in improving industry-level competitive intensity have boosted investor sentiments. Additionally, the resignation of Birla Opus’ CEO was also seen as a positive for Asian Paints, along with a decrease in prices of raw materials.

Strong Q2 earnings growth

The company reported strong quarterly earnings growth with a sharp improvement in operational efficiency. The total sales for the quarter jumped 5.8% YoY, led by robust volume growth. Asian Paints posted 10.9% YoY growth in volumes during the quarter, led by broad-based growth across rural and urban areas. At the operational level, the gross margin improved 270 basis points to 43.1% and the EBITDA margin improved to 18.5%, which was led mainly by raw material deflation of 1.6%. Lastly, excluding the exceptional item, the net profit for the quarter stood at ₹797 crore, up by 19% YoY.

Upbeat management outlook

The management is seeing improvement in demand conditions in the months ahead. GST reforms, festivals, benign inflation and the marriage season are expected to boost demand. Despite the improved demand scenario and reduced competitive intensity, the management expects competition to remain steady. In such a scenario, the company plans to focus on driving innovation, quotient, building brand equity and capturing consumer mind share with aggressive marketing strategies.

What global brokerages said

Following the robust improvement in earnings, buoyant management outlook and changing industry dynamics, global brokerages like Jefferies, HSBC have changed the outlook for Asian Paints. Jefferies said Domestic volume growth in the decorative paint segment, along with market share gains, were key highlights from Q2FY26, led by investments in brands, innovation, and regional activations. While HSBC expects the core decorative business to continue further in the coming quarters, aiding better margins and market share gains for the company.